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AA wants fuel duty hike shelved

The AA has urged the Government to shelve next month's hike in fuel duty after warning that motorists face a new upswing in pump prices.

The motoring organisation said plans to add 1p to petrol and diesel prices from October 1 come at a time when the cost of crude oil and a weaker pound threaten to put additional upward pressure on motoring costs. January's increase in VAT to 20% is set to compound the misery for motorists.

While the AA said average UK pump prices fell for the fourth month in a row during the last month, its latest fuel price report found that drivers were still paying £4.36 a tank more for petrol than a year ago.

AA president Edmund King said the 9p to 10p increase in petrol and diesel prices had landed the Government with a VAT windfall of at least 1p a litre.

"For that reason, the duty hike could be shelved to help economic recovery, ahead of the 2.5% VAT increase next year."

The wholesale cost of petrol has risen by around 2p a litre since mid August and the AA said speculators threaten to increase oil prices to the level that lifted UK petrol prices to May's record high of 121.61p a litre.

Mr King added: "Pump prices remain precarious with the possibility of a new upswing, and it will be bad timing if the 1p-a-litre fuel duty increase in October coincides with another £1 on the cost of a tank of petrol."

Across the UK, London remains the most expensive area for petrol at an average of 116.2p a litre, with Northern Ireland and Wales dearest for diesel at 118.7p. Yorkshire and Humberside is cheapest for both, respectively 114.2p and 117.2p a litre.

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